Since an offset account earns effectively 8.1%, there's about a potential 5.2% handout.

Interesting that the flyer doesn't require me to close the other card. So I can transfer my current balance, pay 2.9% on that, and keep using my Westpac visa as usual. I reckon that's about $7k*5.2% = $360 easy money (my cc balance usually peaks around $7k before I pay it off as required - about $4400 - each month).

I'd be cautious with Citibank, they tend to have terms and conditions such as 'we have the right to change the terms and conditions' and 'other fees and charges may apply'. Actually they should just replace all of them with 'we have the right to do whatever we want'.

I signed up to a deal of theirs a few years ago giving low interest fixed for life on balance transfers. In December they sent me a letter advising me of a change in the terms and conditions that required me to spend 2K before christmas or face a $150 fee. I spent the 2k to avoid the fee but then repayments were deducted from the balance transfer rather than purchases, killing my low interest balance transfer amount.

"Citibank has agreed to make some changes to its ReadyCredit card following concerns raised by the Australian Securities and Investments Commission (ASIC).

Citibank has responded to ASIC’s concerns about the introduction of a $160 fee charged to some ReadyCredit customers who failed to use their card for purchases. Citibank has agreed to allow affected customers until 30 June 2006 to avoid the ‘failure to spend’ fee or close their accounts."

I am planning to withdraw upto the max limit and transfer the amount to my homeloan offset. Will let the money sit in my home loan offset and then transfer it back to ReadyCredit just before the end of the honeymoon period.

I am happy to pay the 1% principal + interest. Let me know if you see any pitfalls in this plan.

I am planning to withdraw upto the max limit and transfer the amount to my homeloan offset. Will let the money sit in my home loan offset and then transfer it back to ReadyCredit just before the end of the honeymoon period.

I am happy to pay the 1% principal + interest. Let me know if you see any pitfalls in this plan.

Cheers
Savio

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I don't see anything wrong with this... I'm planning to do exactly the same thing.

The 1%/$30 charge on $25k has very little effect on the end result, just think that it adjusts the 2.9% interest by a few points, as the balance is reducing a little, from $25k at month zero to about $23600 at the end of six months. Monthly repayments are around $310, totaling $1817 over six months; total interest is $354.

In other words, the 1%/$30 is not an interest charge, so you can do a quick calculation and work out your savings...

This certainly seems too good to be true, and as they say, if it seems too good to be true it probably is! So where's the catch? Anybody got one yet?

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Nope. I just read the entire terms and conditions, and there were no surprises. You don't have to transfer any balances across, and you can close the account at any time, you just need to ask for a payout figure. 2.9% for six months.

I just submitted an online application.

Interestingly they don't tell you what limit you'll get, simply that your application is conditionally approved. The limit - between $5k and $25k - is dependent on your disposable income, but they don't detail their calculations. I'll now wait for the application to go through, then I'll post the outcome (will take a few days).

Thanks Rod. So the catch, I'm guessing, is that if you have a half decent credit history and a good income, they will let you have the minimum 5K. They will then bombard you with marketing literature for the next 20 years. Or am I being too cynical?
What the hell, I'll apply anyway and tell them I earn 20k pa.
It does make you wonder though about the credit crunch, when you see deals like this being offered.